The Benefits of Buying with Tenants in Situ Property investment in Peterborough can sometimes be...
The Benefits of Buying with Tenants in Situ
Property investment in Peterborough can sometimes be a daunting process; firstly you must do your due diligence to make sure that a potential property is going to cover the mortgage stress test, and also you must work out approximately what your return on investment will be considering all costs to determine whether a certain property is going to work for you.
Once you have done the maths, you then have to find and purchase a suitable rental property, prepare the property and put it on the market to find tenants.
But what if you could invest in property with a few of these stages already covered for you?
It is possible for Peterborough landlords to sell occupied property, and if you are looking to invest, this type of sale will allow you to buy a fully functioning investment property complete with tenants.
When you compare potential investment properties it can be hard to know for sure how long it will take to fill a property and how much the rest will be negotiated at. In order to secure a buy to let mortgage, a lender requires the rent to be at least 125% of the mortgage repayments based on a 5% interest rate. This will be based on a rental evaluation, but if you are purchasing with tenants in situ you are basing your mortgage application on a known figure, therefore making certain you can meet the lender requirements.
The property is ready for renters
Provided the vendor was a responsible and compliant landlord, buying a tenanted property means it will be already set up as a suitable rental home. If the property was let through a professional agent it should meet health and safety regulations, and should be equipped with the required fire alarms and a gas safety and electrical safety certificates. It is important you check with the vendor when these will need renewing as they may have several months left or could be due for renewal.
Maximised return on investment
Buying a property with tenants that already live there means you will save all costs of marketing the property to find tenants! You will benefit from rent as soon as the next rent due date comes round following completion. This maximises your investment because there is no void period or period where you will be refurbishing the property ready for new tenants.
Certainty over property history
As the property is already rented, the landlord and managing agent will have detailed history about the property which they can pass on to you. The agent will be able to provide you with details such as: how long the current tenants have been there, if the tenants are reliable at paying rent, rent increase history and maintenance history. A good agent will also be able to help you calculate the yield and Return on Capital that the property will achieve.
Buying property with tenants in situ is quite straightforward as a process and saves you all the effort of finding tenants. You are investing with more certainty, and inherit a property with a track record rather than a clean slate.
At Belvoir Peterborough we sell tenant occuiped properties in Peterborough and Cambridge. This provides a strightforward selling solution for landlords who are looking to move on from their investment without evicting tenants and a fantastic opportunity for investors looking to maximise their return.
To see our latest sales opportunities please click here on call the sales team today on 01733 511099.